WorldWatchReport™ 2012 Key Findings

The Leading Market Research in the Luxury Watch Industry. Since 2004The Leading Market Research in the Luxury Watch Industry Since 2004 www.worldwatchreport.com

The Leading Market Research in the Luxury Watch Industry. Since 2004 Since 2004, the WorldWatchReport™ has provided the luxury watch industry with an exclusive analysis of the leading brands, models and client preferences. The WorldWatchReport™ is based on more than 1 billion unaided client intentions entered into search engines. This search data is collected using Digital Luxury Group’s proprietary technology, and is translated into client intentions related to brands, models, distribution, replicas, price, accessories etc.* *A detailed explanation of the methodology is available on www.worldwatchreport.com/© Digital Luxury Group, DLG SA, 2012 2

The Leading Market Research in the Luxury Watch Industry. Since 2004© Digital Luxury Group, DLG SA, 2012 3

The Leading Market Research in the Luxury Watch Industry. Since 2004 United Kingdom 9.33% -0.74 (y/y) Germany 6.38% -1.77 (y/y) United States 21.20% -9.24 (y/y) Russia 4.64% France 6.80% + 0.49 (y/y) +0.35 (y/y) Qatar 0.19% Spain 2.87% Japan 7.19% Switzerland 1.57% +3.52 (y/y) Mexico 1.36% China 22.88% Italy 5.18% India 2.38% +7.79s (y/y) -1.02 (y/y) +0.63 (y/y) Brazil 2.28% Saudi Arabia Taiwan 0.94% +0.00 (y/y) 0.42% Thailand 1.86% Hong Kong 0.83% United Arab Emirates 0.49% Singapore 1.19% January to December 2011 Y/Y evolution at constant range vs. last year results© Digital Luxury Group, DLG SA, 2012 4

The Leading Market Research in the Luxury Watch Industry. Since 2004  For the first time since the study launched in 2004, China overtook the USA as the country exhibiting the highest demand for luxury watches with a 23% market share.  Highest year-over-year increases were recorded in China (+7.8 percentage points), Japan (+3.5 pp), India (+0.6 pp) and Russia (+0.5 pp) while most western markets experienced significant market share drops, especially the US (-9.2 pp), Germany (-1.7 pp) and Italy (-1 pp).  Russia (capturing 4.6% of total searches), India (2.4%) and Brazil (2.3%) are positioned as strategic second-tier growth markets, ahead of the Middle East (1.1%), Taiwan (0.9%) and Hong Kong (0.8%).© Digital Luxury Group, DLG SA, 2012 5

The Leading Market Research in the Luxury Watch Industry. Since 2004 Share of Rank Administrative Division searches 1 Beijing北京 6.6% 2 Shanghai上海 6.1% 3 Zhejiang浙江 5.8% 4 Guangdong广东 5.8% 5 Jiangsu Province江苏 5.3% 6 Liaoning Province辽宁 4.4% 7 Shandong山东 4.3% 8 Henan河南 3.8% 9 Fujian Province福建 3.6% 10 Hebei河北 3.6% 11 Tianjin天津 3.6% 12 Hubei湖北 3.5% 13 Sichuan Province四川 3.5% 14 Heilongjiang黑龙江 3.4% 15 Anhui安徽 3.2% 16 Shaanxi陕西 3.0% 17 Jilin吉林 3.0% 18 Hunan湖南 2.9% 19 Shanxi山西 2.9% 20 Chongqing重庆 2.6% 21 Guangxi广西 2.5% 22 Jiangxi Province 江西 2.4% 23 Inner Mongolia内蒙古 2.3% 24 Yunnan云南 2.2% 25 Guizhou贵州 1.7% 26 Xinjiang新疆 1.7% 27 Hong Kong香港 1.6% 28 Hainan海南 1.6% 29 Gansu Province甘肃 1.4% 30 Ningxia宁夏 0.9% 31 Qinghai青海 0.5% 32 Tibet西藏 0.3%Baidu Data Only January to December 2011 © Digital Luxury Group, DLG SA, 2012 6

The Leading Market Research in the Luxury Watch Industry. Since 2004  Composed of three major regions and 56 ethnics groups, China’s diversity requires an in-depth understanding of local culture and clientele preferences.  Large coastal region cities such as Beijing, Shanghai, Hangzhou, and Dalian, gathered 57% of the nation’s share of searches for luxury timepieces, highlighting the opportunity for brands to tap into developing central China.  While Omega and Longines hold the top 2 positions in most provinces, Guangdong province shows a preference for Rolex, Cartier’s highest interest level is in Shanghai, Patek Philippe is most favored by Beijing and Guangdong provinces, and Vacheron Constantin captures the lion share in Zhejiang and Jiangsu.© Digital Luxury Group, DLG SA, 2012 7

The Leading Market Research in the Luxury Watch Industry. Since 2004 January to December 2011© Digital Luxury Group, DLG SA, 2012 8

The Leading Market Research in the Luxury Watch Industry. Since 2004  The top 3 worldwide luxury watch brands outshine the other brands, gathering 41% of the total global market share for consumer interest.  Highest year-over-year increases were seen for Omega (+1.78 percentage points) and Longines (+1.35 pp) – where China counts for 30% and 66% of total demand, respectively. Breitling (-2.1 pp) and Rolex (-1.6 pp), on the other hand, are losing share of the total global interest - two brands for which China accounts for 2.5% and 13% of total searches, respectively.  Among the 15 newly tracked brands in the study, three appeared in the Top 15. Fashion brand Chanel, Richemont-owned Panerai, and Rolex’s sister brand Tudor ranked highly, evidencing their position as key industry actors.© Digital Luxury Group, DLG SA, 2012 9

The Leading Market Research in the Luxury Watch Industry. Since 2004 Historical search market share evolution at constant perimeter (25 brands, 10 markets)© Digital Luxury Group, DLG SA, 2012 10

The Leading Market Research in the Luxury Watch Industry. Since 2004  By gaining +2 percentage points in market share in the US (the 2nd largest market) and recording an increase of 20% to 38% in the European markets, Rolex has been able to maintain its position as the most searched for brand in the luxury watch industry in 2012.  Accelerated by the Beijing Olympic Games in 2008, Omega’s development in China reached a new peak this year (+4 percentage points), by becoming the most searched brand in China, with 20.2% of total searches. Longines follows with 18.9% of total searches and Rolex in third position with 10.5%.  The trends observed show that there very well could be a shift in leadership in the coming years. Something to watch for…© Digital Luxury Group, DLG SA, 2012 11

The Leading Market Research in the Luxury Watch Industry. Since 2004 2012 2011 2010 Brand Models Total 1 1 1 = Omega Seamaster 5.02% 2 2 3 = Rolex Submariner 4.89% 3 3 4 = Rolex Daytona 3.86% 4 6 5  Tag Heuer Carrera 3.56% 5 5 7 = Rolex Datejust 3.15% 6 4 2  Omega Speedmaster 2.80% 1. Seamaster 7 21 27  Rolex Day Date 2.04% Omega 8 18 18  Rolex Explorer 1.81% 9 7 8  Cartier Tank 1.73% 10 8 -  Rolex Oyster Perpetual 1.69% SUB-TOTAL 30.55% OTHERS 69.45% TOTAL 100.00% 2. Submariner 3. Daytona Rolex Rolex January to December 2011© Digital Luxury Group, DLG SA, 2012 12

The Leading Market Research in the Luxury Watch Industry. Since 2004  Among the 1,300+ specific watch models tracked by the WorldWatchReport™, the top 10 models account for 30% of the total global interest.  For the last 3 years, Omega’s Seamaster, Rolex’s Submariner and Rolex’s Daytona have held the top three positions. This year, Omega’s Speedmaster fell two places, while Rolex’s Day Date and Explorer models jumped up in the rankings.  Iconic brands such as TAG Heuer and Cartier saw their highly popular collections Carrera (4th) and Tank (9th) featured in the top 10 ranking of most-searched models – placing these brands in the league of heavy-hitters like Rolex and Omega.© Digital Luxury Group, DLG SA, 2012 13

The Leading Market Research in the Luxury Watch Industry. Since 2004 January to December 2011© Digital Luxury Group, DLG SA, 2012 14

The Leading Market Research in the Luxury Watch Industry. Since 2004  Overall study results show a decrease of replica related searches, representing 1.85% of total searches compared to 4.5% last year.  China is now the 6th ranked market for replica related searches compared to its 4th place ranking last year. In 2011, 2.1% of total luxury watch searches in China were linked to an interest for counterfeits, but this year the figure has dropped to 0.51%. This underlines a Chinese consumer appreciation for genuine products.  Among the 40 brands analyzed, the demand for replica sport watches is the highest, with Rolex representing 51% of the total demand for counterfeits worldwide, followed by Breitling (9%) and Tag Heuer (5.3%).© Digital Luxury Group, DLG SA, 2012 15

The Leading Market Research in the Luxury Watch Industry. Since 2004 The most comprehensive Country specific segment. Executive summary, edition, tracking the Detailed insights of the featuring the highlights of performance of 40 brands in brands available for each of the Full Edition for 40 20 markets the 20 markets. brands in 20 markets For more information on the contents of each edition and how to pre-order, visit: www.worldwatchreport.com© Digital Luxury Group, DLG SA, 2012 16

The Leading Market Research in the Luxury Watch Industry. Since 2004 Digital Luxury Group, DLG SA, is the first international company dedicated exclusively to the design and implementation of digital communication strategies for luxury brands. Since 2004, DLG has been publishing the WorldWatchReport™ a baseline market study for the watchmaking industry in partnership with EuropaStar and with the precious support of the Fondation de la Haute Horlogerie. Contact: Nicolas HANSSENS Research Manager nhanssens@digital-luxury.com Florent BONDOUX Business Unit Manager Strategy & Intelligence Business Unit fbondoux@digital-luxury.com Digital Luxury Group, DLG SA 7 Avenue Krieg CH-1208 Geneva Visit our website to get detailed information: Switzerland www.worldwatchreport.com or www.digital-luxury.com© Digital Luxury Group, DLG SA, 2012 17

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WorldWatchReport™ 2012 Key Findings

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